Chinese architects are grappling with layoffs, pay cuts, and wage arrears as the country’s property industry faces a severe crisis. Architects based in major cities such as Beijing, Shanghai, Guangzhou, and Shenzhen have reported these challenges in the past year. The turmoil in China’s property sector, characterized by spiraling developer debt and stalling construction projects, has caused widespread impact on architecture firms.
Amid a period of booming urban development, many architecture firms are now facing a decline in revenue, with reliable clients no longer commissioning projects. Out of 13 publicly listed architecture firms in China, only one experienced revenue growth in the 2022 financial year. The crisis has forced firms to downsize their teams and curb recruitment due to the lack of projects.
One notable case is that of Shenzhen General Institute of Architecture Design & Research (SZAD), a state-owned firm known for designing supertall buildings. SZAD, once employing almost 3,700 people, has been significantly affected by the financial woes of its former strategic partner, developer Evergrande. The debt crisis in the property industry has led to reduced pay and the non-payment of bonuses for many architects.
Architects have been working excessively long hours, with some reporting working until the early hours of the morning for consecutive months. The demand for speed in project completion has created high pressure and a culture of working overnight and through weekends. Many firms have had to compete for projects by accepting lower fees or risking not getting paid at all.
The challenging situation in the property industry has exposed the vulnerabilities of architects and the need for changes in the way they are remunerated. Architecture firms often use a salary structure that relies heavily on project-related bonuses, which can leave architects uncompensated if clients fail to pay. The current crisis serves as a wake-up call for the industry to reassess payment models and advocate for fair compensation.
Source: Dezeen, LifeWeek, Chinese publication The Paper